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regular-article-logo Thursday, 23 May 2024

Adani-Total, IOC buy gas from Reliance

Reliance-BP on Wednesday held e-auction for sale of gas from MJ field in their eastern offshore KG-D6 block

PTI New Delhi Published 14.04.23, 04:51 AM
The final bid price came at $0.75 per million British thermal unit premium over the JKM price (JKM + $0.75 per mBtu)

The final bid price came at $0.75 per million British thermal unit premium over the JKM price (JKM + $0.75 per mBtu)

Indian Oil Corporation (IOC), Adani-Total Gas Ltd and Shell were among the 29 companies that bid and bought natural gas to be produced from the deepest field in the KG-D6 block of Reliance Industries and BP, sources said.

IOC walked away with almost half of the 6 million standard cubic meters per day (mscmd) of gas sold in an e-auction on Wednesday while state-owned gas utility GAIL bought 0.7 mscmd, Adani-Total Gas Ltd 0.4mscmd, Shell 0.5mscmd, GSPC 0.25mscmd and IGS another 0.5mscmd, two sources with knowledge of the matter said.

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Reliance-BP on Wednesday held an e-auction for the sale of gas from the MJ field in their eastern offshore KG-D6 block.

The bidding saw participation from 41 companies from various sectors, sources said adding unlike the previous auction Reliance did not buy any of KG-D6 gas.

The price was indexed to the global LNG market, JKM (Japan Korea marker), but will be subject to the government-notified ceiling price. Bidders were asked to quote variable ‘V’ in the gas price formula ‘JKM + V’.

The final bid price came at $0.75 per million British thermal unit premium over the JKM price (JKM + $0.75 per mBtu), they said.

JKM price for May is around $12.6 per mBtu and the implied price for MJ gas comes to $13.35.

But the bidders will only have to pay the ceiling or the cap price that the government fixes bi-annually for gas produced from difficult areas such as deepsea and high-temperature, high-pressure (HTHP).

The ceiling price for April to September is $12.12 per mmBtu, they said adding 29 bidders secured gas supplies for 5 years.

The successful bidders included India’s largest oil firm IOC which bought 1.4 mscmd of gas for its own refineries and another 1.5 mscmd acting as aggregator for the urea sector.

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